The forex trading headlines for the European session

  • BOE MPC votes unchanged for QE and interest rates.sees inflation expectations in line with forecasts and sees growth subdued
  • UK claimant count march -7k vs -0.0k exp. -5.3k prev revised up from -1.5k.
  • UK unemployment rate feb 7.9% vs 7.8% exp and 7.8% prev
  • UK average earnings feb +0.8% vs +1% exp. headline rate +1% vs +1.2% exp
  • Japan consumer confidence index 44.8 vs 44.2 prev. Highest reading since May 2007
  • Nikkei closes up 1.22% at 13.382.89 and ends 3 day losing run
  • German 10yr bund top-up allots EUR3.35bln at records lowest yield of 1.28%
  • Sweden leaves interest rates at 1% and dampens hopes of repo rate hike anytime soon
  • France to cut public deficit to 3.7% of GDP in 2013

A risk-off session that has seen the pound take the main hit and the euro not far behind after yesterday’s strong rally which in itself had many traders, me included, scratching their heads.

Early demand for EURJPY kept EURUSD well supported but sell orders at 98.50 capped the rally on USDJPY and the rot started as momentum faded. Slowly at first but then gathered pace as support on EURUSD and GBPUSD at 1.3150 and 1.5300 gave way.

UK jobs data was mixed with better claimant count but higher unemployment rate and with lower average earnings was enough to start a move lower for the pound. EURGBP was the first to take the hit, easily chewing through sell orders at 0.8600 to post highs of 0.8637 ahead of strong sell interest at 0.8650. GBPJPY though has been on the mover lower all morning and has so far posted lows of 148.82 vs Asian highs of 151.17.

The BOE MPC voting was unchanged but that was of little comfort to the pound and we’ve since seen low posts on cable of 1.5244 after a big battle at 1.5250. EURGBP though has fallen back to 0.8607 as the euro gets kicked down on talk of ECB members past and present expressing concerns over growth and euro strength. EURUSD has been to 1.3121 and EURJPY 128.11.

AUD and NZD have fallen too as the yen buying spread far and wide and now we wait to see whether the afternoon session wants to offer any sort of reversal.